SINGAPORE: The proposed acquisition of homegrown food court operator Kopitiam by NTUC Enterprise has been cleared by Singapore's competition watchdog.
The acquisition was approved as it would not lead to a "substantial lessening of competition within relevant markets in Singapore", the Competition and Consumer Commission of Singapore (CCCS) said in a media release on Thursday (Dec 20).
As part of its assessment, CCCS conducted a public consultation over two weeks in October. It also spoke to landlords, competitors, customers, representatives of hawker associations and various government agencies.
"The majority of the stakeholders indicated that they have no concerns with the proposed transaction, with a few raising concerns," CCCS said.
The concerns were mainly of Foodfare becoming a "bigger player" and enjoying stronger bargaining power over landlords. The stakeholders also raised the possibility that with fewer operators, stall holders and customers could see higher rental fees and food prices.
The competition watchdog said it found that even after the acquisition, many other strong competing operators remain, such as Koufu, Food Junction, Food Republic, Kimly and Broadway.
Collusion between operators of food courts and coffee shops was deemed to be unlikely, as the large number of competing operators and low degree of transparency of rental and fees charged makes it difficult for operators to monitor one another.
NTUC Enterprise has also said that relationships between stall holders and their preferred suppliers would not be disrupted as it will not require stall holders to procure food supplies from NTUC Enterprise exclusively.
CCCS said it was unlikely for the lease of stall space to competing operators to be restricted or refused in order for NTUC Enterprise to shut out the competition, as operators had the option of leasing stall space from alternate lessors instead.
ACQUISITION TO BE COMPLETED IN JANUARY
NTUC Enterprise on Thursday welcomed the watchdog's decision.
The acquisition is expected to be completed in January next year, it said, adding that Foodfare and Kopitiam will continue to operate separately with their respective management teams and employees.
Kopitiam loyalty card users can continue to use their cards at all Kopitiam outlets, it added.
"NTUC Enterprise will continue to work as a group to fulfil our social mission of providing quality essential services and products,” said executive director Kee Teck Koon.
“In particular, with the combined footprint of NTUC Foodfare and Kopitiam, we will be in a better position to make quality cooked food affordable and more widely accessible to all.”